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It’s jobs day! The U.S. employment report for October is out at 8:30 a.m. ET. Today we also look at progress and prospects for resolving the U.S.-China trade fight, slower growth at U.S. factories, so-so worker productivity, labor disruptions, and the company that’s following you by tracking your smartphone.
GOOD COP
President Trump said he had a “very good conversation” with President Xi Jinping of China, signaling progress in the nations’ trade dispute. The president’s upbeat assessment came as an impasse over trade has threatened to undermine a planned meeting between the two leaders at the Group of 20 leaders summit in Buenos Aires later this month, Vivian Salama, Aruna Viswanatha and Kate O’Keeffe report.
Mr. Trump said the two discussed many issues by telephone on Thursday, including the trade dispute that has sparked tit-for-tat tariffs on hundreds of billions of dollars of goods flowing between the two countries, worrying U.S. businesses and investors.
BAD COP
Despite the conversation, the sides remain at somewhat of an impasse. The U.S. wants China to come forward with a specific negotiating agenda before resuming preliminary talks—something China hasn’t done. Highlighting the ongoing tension, the U.S. Justice Department accused Chinese state-owned Fujian Jinhua Integrated Circuit of stealing trade secrets from the largest U.S. memory-chip maker, Micron Technology, in a grand jury indictment unsealed on Thursday. The move came days after the Commerce Department barred exports and transfers of U.S.-origin technology to Jinhua. And Attorney General Jeff Sessions said recent activity showed China was violating an accord under which both governments agreed not to support cyberattacks to steal corporate secrets.
Markets were more attuned to the president than the Justice Department: Asian stocks and the Chinese yuan jumped Friday.
What do you think is more likely this year: a U.S.-China trade deal or the imposition of additional tariffs? Write to Jeffrey Sparshott at realtimeeconomics@wsj.com, tweet to @WSJecon and visit wsj.com/economy for the latest news. (Responses may be quoted in this newsletter.)
WHAT TO WATCH TODAY
U.S. nonfarm payrolls for October, out at 8:30 a.m. ET, are expected to rise by 188,000 from the prior month, and the unemployment rate is expected to hold steady at 3.7%. Here are five things to watch in the report.
The U.S. trade deficit for September, out at 8:30 a.m. ET, is expected to widen to $53.8 billion from $53.24 billion the prior month.
Canada’s employment report for October is out at 8:30 a.m. ET.
U.S. factory orders for September, out at 10 a.m. ET, are expected to rise 0.5% from the prior month.
TOP STORIES
MASS PRODUCTION
American factory activity decelerated in October. At least part of the reason: Exports are slowing, and primary and fabricated metals industries are contracting. We can probably blame tariffs, a stronger dollar and slower growth abroad. To be sure, overall sales of factory-made products and employment in the manufacturing sector continued to grow, just at a slower pace. But the Trump administration’s steel and aluminum tariffs and retaliatory tariffs by foreign countries are having an impact, notably on the companies that make raw metals into intermediate goods, Sharon Nunn reports.
“Manufacturing is only 12% of the economy so the wider fallout should be limited but, with the boost from fiscal stimulus now fading and borrowing costs continuing to rise, this would be another reason to expect GDP growth to slow over the coming quarters,” says Capital Economics’s Andrew Hunter.
WORK SMARTER
There’s been a missing ingredient in the second-longest U.S. expansion on record: substantial worker-productivity gains. Output per hour for workers in nonfarm businesses rose 1.3% in the third quarter from a year earlier, marking the 32nd straight quarter below 2%, a long and consistent stretch of anemic growth that hasn’t happened before in the post-World War II era, Harriet Torry and Sarah Chaney write.
There were some signs of improvement. For a six-month period between April and September, worker productivity gains beat a 2% annualized growth rate. But if the latest six-month stretch doesn’t hold up, some economists say, the economy’s fast overall growth rate won’t be sustained.
#GOOGLEWALKOUT
Thousands of Google employees around the world staged a series of walkouts Thursday to protest a workplace culture that they say promotes and protects perpetrators of sexual harassment at the tech giant. The protests marked perhaps the largest display of employee activism concerning sexual harassment in a year in which the issue has come to the fore at companies world-wide, Douglas MacMillan, Ezequiel Minaya and Mengqi Sun report.
WHAT CAN’T BROWN DO FOR YOU?
We’ve documented how a stronger economy and tight labor market are giving workers more confidence to demand employer concessions through strikes. Next up: United Parcel Service. The shipper is telling customers to make alternative plans in case of a strike in its smaller freight division, where unionized workers are set to vote on the company’s final contract offer next week. A contract extension expires on Nov. 12, after which the 11,000 Teamsters members could go on strike. The Teamsters have already authorized a strike, which would be the first work stoppage at UPS since 1997, Paul Ziobro reports.
I’M WATCHING YOU
Thasos Group is at the vanguard of companies trying to help traders get ahead of stock moves by using so-called alternative data. Such suppliers might examine mine slag heaps from outer space, analyze credit-card spending data or sort through construction permits. Thasos’s specialty is spewing out of your smartphone, Ryan Dezember reports.
Thasos gets data from about 1,000 apps, many of which need to know a phone’s location to be effective, like those providing weather forecasts, driving directions or the whereabouts of the nearest ATM. Smartphone users, wittingly or not, share their location when they use such apps. With more than 100 million phones providing such coordinates, Thasos says it can paint detailed pictures of the ebb and flow of people, and thus their money.
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
Apple reported its fourth consecutive quarter of record revenue and profit this week, a testament to the popularity of its devices. A closer look at its product array is also a testament to technological innovation and the forces holding back inflation: The American Enterprise Institute’s Bret Swanson estimates it would have cost around $28 million to purchase the basic building blocks of today’s iPhone XS back in 1991. That’s not even including the camera, display, random access memory, MEMS gyroscope and accelerometer.
Nobody likes working when it’s hot out. University of Texas at Austin’s Melissa LoPalo studied demographic and health survey results across 46 countries for evidence: “I find that interviewers complete 20% fewer interviews per hour on the hottest and most humid days relative to mild days. Workers complete more interviews in the cooler parts of the day at the expense of spending more hours in the field with the same pay. In addition, interviewers become differentially less productive on tasks that are less easily monitored. These findings are important not only because temperatures are predicted to rise significantly over the next century, but also because they shed light on how adaptation by workers to adverse conditions can be costly in ways not captured by aggregate productivity measures such as GDP.”
from Real Time Economics https://ift.tt/2P8r56N
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